MEET THE NEW BREED OF AD AGENCY CHIEFS

A new wave of first-time CEOS are opt­ing to do things dif­fer­ently in an evolv­ing land­scape. They dis­cuss the busi­ness model of the fu­ture with Jeremy Lee

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So is it a mere co­in­ci­dence that more than ten Lon­don ad agen­cies have seen new chief ex­ec­u­tives all parachuted in within a pe­riod of months? Or is this tes­ta­ment to the un­prece­dented lev­els of change that the cre­ative sec­tor is go­ing through?

Change is cer­tainly in the air. Ad­ver­tis­ers are in­creas­ingly look­ing

for “bun­dled” so­lu­tions to their needs, per­haps ren­der­ing the agency brand ob­so­lete. Agen­cies now have to pro­duce “con­tent”, whether that be ad­ver­tis­ing or not, in an in­creas­ingly short time-frame. Man­age­ment con­sul­tants have spied an op­por­tu­nity to join the fray. Some mar­keters are even tak­ing their re­sources in-house. And all this against a back­drop of a squeeze on agen­cies’ profit mar­gins.

To some, this has been in­ter­preted as an in­dus­try in cri­sis – not just of iden­tity but of its fu­ture busi­ness model. Our 11 chief ex­ec­u­tives, as­sem­bled at the Cen­tury Club, dis­pute this dooms­day sce­nario. In fact, rather than be­ing the hos­pi­tal pass the doom-mon­gers would have us be­lieve, their col­lec­tive ap­point­ments sim­ply re­flect an evo­lu­tion­ary pass­ing of the flame in or­der to nav­i­gate the new times in which we live. And this doesn’t faze them.

James White­head, chief ex­ec­u­tive of J Wal­ter Thomp­son Lon­don, says of the cur­rent agency land­scape: “It’s never been more dy­namic and it’s not bro­ken. So it’s not sur­pris­ing there are more lead­ers.”

Ja­son Gon­salves, chief ex­ec­u­tive of Mc­gar­ry­bowen, agrees and even sug­gests the change to date hasn’t been pro­found enough. “We’re an in­dus­try that needs to be trans­formed – it’s been in a sta­ble state for a long time,” he says. “The lead­ers prior to us were fo­cused on man­ag­ing prof­itabil­ity. The skills they had were about main­te­nance and bring­ing the same peo­ple in, and it was all about suc­ces­sion man­age­ment and sta­bil­ity. We’ve got to trans­form.”

It’s a theme echoed by Mel Exon, group chief ex­ec­u­tive of Sun­shine: “If this was re­ally rad­i­cal change, we’d all be 25 years old. I mean, look at us – we’re all an old bunch of fuck­ers.”

The re­al­ity of what agen­cies are ex­pected to de­liver th­ese days re­quires a change in mind­set, skills and pri­or­i­ties. Exon adds that be­ing com­fort­able with change and am­bi­gu­ity is a pre­req­ui­site for all new lead­ers. But isn’t that some­thing that has al­ways been re­quired?

Not nec­es­sar­ily, ac­cord­ing to Bill Scott, chief ex­ec­u­tive of Droga5 Lon­don: “I think at­ti­tude to risk would be part of it – there’s so much uncer­tainty. You have to be pre­pared to deal with risk that our fore­bears didn’t.”

For Jon Sharpe, chief ex­ec­u­tive of Y&R Lon­don, the ad­ver­tis­ing in­dus­try is only re­act­ing to changes that its clients are go­ing through: “Our clients are feel­ing the dis­rup­tion the most – our model isn’t bro­ken but needs adapt­ing.” He too is con­fi­dent that it can man­age to tra­verse the chal­lenges in tech­nol­ogy, pro­duc­tion and prov­ing the power of cre­ativ­ity. “Ad­ver­tis­ing does things that are more rel­e­vant than ever,” Sharpe adds. “When you look at the com­pet­i­tive set, no-one else can tell sto­ries with emo­tional power – it’s not some­thing that KPMG or Ac­cen­ture do amaz­ingly. We need to re­gain con­fi­dence.”

The march of the con­sul­tants

The is­sue of man­age­ment con­sul­tants proves to be an in­ter­est­ing talk­ing point. With Ac­cen­ture hav­ing parked a small­ish tank on the in­dus­try’s lawn with its ac­qui­si­tion of Kar­marama (and, more re­cently, Syd­ney-based The Mon­keys), some soul-search­ing is in or­der as our chief ex­ec­u­tives con­sider ad­ver­tis­ing’s place in the sup­ply chain.

White­head is rel­a­tively san­guine. “It’s a cul­tural chal­lenge. I think Kar­marama might not sur­vive and get crushed by the [man­age­ment con­sul­tant] cul­ture,” he says. How­ever, Jo Coombs, chief ex­ec­u­tive of Ogilvy­one, isn’t so sure – she thinks that by ig­nor­ing the threat, “we run a risk of not see­ing what’s eat­ing our break­fast”. Leo Rayman, chief ex­ec­u­tive of Grey Lon­don, sug­gests it might force the in­dus­try to change its game.

Given that Ac­cen­ture’s 2016 rev­enues dwarfed that of even WPP, the threat seems real enough. But that doesn’t mean the man­age­ment con­sul­tants will nec­es­sar­ily be able to at­tract or re­tain the right tal­ent. And that’s where ad­ver­tis­ing has the ad­van­tage, Coombs be­lieves.

Xavier Rees, chief ex­ec­u­tive of Havas Lon­don, thinks the so­lu­tion lies in prov­ing ad­ver­tis­ing’s worth: “We need to start hav­ing more im­pact again. I think that’s why we are at an in­ter­est­ing mo­ment.”

Exon points out that cre­ative com­pa­nies have shied away from de­scrib­ing them­selves as con­sul­tants when that is in fact ex­actly what they do. “If you are a con­sul­tant, you can charge a com­pletely dif­fer­ent rate. You are of­ten in­vited into C-suite con­ver­sa­tions and you’re lis­tened to,” she says. “I don’t think we should de­cry con­sul­tants com­ing in and mak­ing a few peo­ple in ad­land quite rich and say that’s a dis­as­ter – it could be the fu­ture of that par­tic­u­lar in­dus­try.”

Up­stream ad­ver­tis­ing

Mov­ing ad­ver­tis­ing up­stream isn’t a par­tic­u­larly new theme or chal­lenge. How­ever, the grab for data pro­vides an op­por­tu­nity to do so, ac­cord­ing to Scott, while White­head says that one of the big­gest is­sues the in­dus­try needs to over­come is its in­her­ent in­su­lar­ity. “His­tor­i­cally, as an in­dus­try, we have been lots of in­su­lar busi­nesses – I think back to pre­vi­ous man­age­ments and they have been run­ning a com­pany that had to work on be­ing quite in­su­lar,” he says. “Now we have to knock down the walls and be com­pletely con­fi­dent about our own dif­fer­ence.”

Mat Goff, joint chief ex­ec­u­tive of Adam & EVE/DDB, isn’t too wor­ried. “The truth is there’s never been a more ex­cit­ing time to use cre­ativ­ity to come up with rel­e­vant and en­gag­ing so­lu­tions – where they live and where they go doesn’t mat­ter,” he says. “The lev­els of skills are es­sen­tially the same – how we ap­ply them, where they go, how fast we have to do that and who is go­ing to re­spond will change.”

But don’t for­get it is not just man­age­ment con­sul­tants that are in dan­ger of eat­ing agen­cies’ lunches, Sharp says: “Our com­pet­i­tive set is not just man­age­ment con­sul­tants – it’s pub­lish­ers, in­flu­encers, media agen­cies, pro­duc­tion com­pa­nies… the list goes on and on. The big is­sue is the mas­sive broad­en­ing of the com­pet­i­tive set.”

Fu­ture-proof­ing the in­dus­try

With this risk in mind, how best can the in­dus­try equip it­self for the fu­ture? In­no­va­tion and col­lab­o­ra­tion are two things that crop up fre­quently.

For Coombs, the need for chief ex­ec­u­tives to set the di­rec­tion of their agency re­mains key. Rees adds: “Our job is to lead peo­ple who, unashamedly, we don’t know what they do – we’re not ex­pert in what they do. We’re hav­ing to grow up and, as lead­ers, un­der­stand that it’s OK not to un­der­stand what every sin­gle per­son does – and that changes the na­ture of how we have to lead.”

Flex­i­bil­ity in em­ploy­ment prac­tices is also im­por­tant. “It’s not just about ac­quir­ing dif­fer­ent tal­ent,” Coombs says. “It’s about: how do we let peo­ple be more f lex­i­ble in the way they work?”

Char­lie Rudd, chief ex­ec­u­tive of Ogilvy & Mather Lon­don, agrees. “The big­gest chal­lenge on tal­ent is that it’s not go­ing to come into the in­dus­try like when we were grow­ing up,” he ex­plains. “You have to adapt and have a cul­ture that at­tracts peo­ple – but don’t be sad when they move on to some­thing else. Be an at­trac­tive place – some peo­ple will stay but a lot won’t, and that will help our di­ver­sity. Agen­cies aren’t very well-set-up – we think we shape peo­ple’s ca­reers for the long term and it’s wrong.”

Di­verse re­cruit­ment

Di­ver­sity is an is­sue that has dom­i­nated the head­lines for the past two years but the chief ex­ec­u­tives are unan­i­mous that all this hot air has yet to be trans­formed into ac­tion. The “Lon­don bub­ble” is of­ten used to de­scribe how the ad­ver­tis­ing in­dus­try is iso­lated from large swathes of the coun­try. But Gon­salves thinks this is a mis­nomer: “Our in­dus­try doesn’t even re­motely rep­re­sent the pop­u­la­tion of Lon­don. It doesn’t scratch the sur­face.”

The need for ad­ver­tis­ing to look out­side its tra­di­tional and eas­ily ac­cessed tal­ent pools is a clear theme – as is the need to put some fun back into the in­dus­try if it is to stem the flow of peo­ple to tech­nol­ogy and en­ter­tain­ment com­pa­nies.

Rayman talks of the frus­tra­tion he en­coun­tered when he put out a brief for a job. “What came back were 49 slides of white male faces. What’s in­cum­bent on us as lead­ers is how hard you’re pre­pared to push [the di­ver­sity agenda].”

Rees con­curs: “We should all be ashamed at the way the in­dus­try has failed to adapt – there’s been a lot of talk and some ac­tion. For 40 years, we have hired from our own. We have to look some­where else. The in­dus­try has got an image prob­lem.”

Given that hold­ing com­pa­nies are in­creas­ingly pitch­ing bun­dled,

multi-agency so­lu­tions, di­min­ish­ing the iden­tity of in­di­vid­ual shops, is this part of the image prob­lem? Not so, the chief ex­ec­u­tives say. In fact, they be­lieve the shift al­lows them to com­pose any num­ber of col­lec­tives to meet the chal­lenges of media frag­men­ta­tion. And “bun­dles” are not the only so­lu­tion – there are also the pos­si­bil­i­ties of bring­ing fluid work­ing prac­tices and dif­fer­ent tal­ent into the process.

The re­turn of swag­ger

The gen­eral con­sen­sus is that the work that agen­cies are pro­duc­ing just isn’t cut­ting through now as it did in the past. Swag­ger, an­other at­tribute of­ten as­so­ci­ated with the past, is also seen to be lack­ing and it is some­thing that the chief ex­ec­u­tives seem keen to rekin­dle.

For Rayman, the in­dus­try (and, by ex­ten­sion, ad­ver­tis­ers) has be­come too fo­cused on short-term met­rics, even if this isn’t nec­es­sar­ily where ad­ver­tis­ing should be head­ing. “Our big­gest im­pact is long-term brand-build­ing that works,” he says. “That doesn’t mean we shouldn’t do bril­liant short-term con­ver­sion-driv­ing ac­tiv­i­ties but, if we end up just do­ing what Ac­cen­ture is of­fer­ing, I feel that im­per­ils the value of what we re­ally can of­fer.”

Tammy Einav, joint chief ex­ec­u­tive of Adam & EVE/DDB, con­tin­ues: “It goes back to cre­ativ­ity and the out­put. Con­sumers have a fixed band­width and, if we con­fuse vol­ume of con­tent with cre­ativ­ity, that’s where there’s a dan­ger. We must en­sure that the cre­ative out­put is bril­liant.”

Mak­ing more work that has an im­pact on pop­u­lar cul­ture is an am­bi­tion that all seek to achieve. And while there’s noth­ing new in that, what does of­fer new op­por­tu­ni­ties is the chance to cre­ate a new model that in­cludes the cre­ation and own­er­ship of in­tel­lec­tual prop­erty. Get­ting rid of the old hours­based re­mu­ner­a­tion sys­tem would be a start in the broader ap­pli­ca­tion of cre­ativ­ity. This is some­thing that Sun­shine is al­ready do­ing, Exon says.

Shift­ing the dial

So what does suc­cess look like for th­ese lead­ers? Einav says: “I think there’s some­thing pow­er­ful in mo­men­tum – keep­ing mo­men­tum, grow­ing tal­ent while con­tin­u­ing to do bril­liant work. It’s about seek­ing op­por­tu­ni­ties in busi­ness growth and tal­ent pool.”

If our chief ex­ec­u­tives are to be be­lieved, the fu­ture is there­fore about us­ing more di­verse tal­ent to cre­ate more di­verse rev­enue streams, while en­sur­ing that ad­ver­tis­ing’s con­tri­bu­tion – in what­ever form that takes – re­ceives the ac­co­lades from the wider busi­ness com­mu­nity that it should.

A shift in the dial is re­quired but the busi­ness has gone through sim­i­lar change in the past – and there’s no rea­son why it can’t suc­cess­fully do so again. A di­ver­si­fied busi­ness with im­proved cre­ative stan­dards will fend off the chal­lenges that it faces – and th­ese 11 new chief ex­ec­u­tives are op­ti­mistic that they are up to the job. The ev­i­dence of their labours will be ea­gerly an­tic­i­pated.

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